India Exports Slow, Deficit Widens in December

India's trade deficit expanded to $25 billion in December, a notable increase from the previous year, primarily due to a deceleration in export growth. Outbound shipments rose by a marginal 1.9% in December, a stark contrast to the high growth rates seen earlier. This slowdown occurred as India focuses on diversifying its trade relationships beyond traditional partners.

While goods exports showed resilience, services exports experienced a contraction of 4% in December, largely attributed to a high base from the prior year. However, the government remains optimistic, projecting that combined goods and services exports will exceed $850 billion for the current fiscal year. This optimism is fueled by strategic diversification efforts and government support programs for exporters.

Sectors such as electronics, pharmaceuticals, and engineering goods have demonstrated robust growth, contributing positively to overall trade figures. The government continues to explore new trade agreements, including ongoing discussions with Canada for a free trade agreement, aiming to bolster India's position in the global market.